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FCC’s Wheeler Testifies Before House Subcommittee, Defends Record on Net Neutrality

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WASHINGTON, May 20, 2014 – Federal Communications Commission Chairman Tom Wheeler came under heavy criticism during a Tuesday hearing before the House Energy and Commerce Subcommittee on Communications and Technology, with many members expressing disapproval of the agency’s recent performance, particularly over the issue of network neutrality.

Rep. Greg Walden, R-Ore., criticized the agency’s “selective inaction,” warning that it was treading in “rough waters.” He criticized the agency for failing to complete its quadrennial review of broadcast ownership rules.

Walden also expressed disapproval of the move to reclassify broadband as a Title II, or common carrier, telecommunications services. Doing so would give the FCC authority to “second-guess business decisions.”

“The modern communications landscape bears no resemblance to the world Title II is meant to regulate,” Walden said. The reclassification of broadband service providers…will harm consumers, halt job creation, curtail innovation, and stifle investment… We should also be aware that [reclassification] opens the door for states to regulate the Internet.”

Other Republicans on the subcommittee shared Walden’s criticism. Rep. Fred Upton, R-Mich., expressed frustration over the partisanship that the Commission had shown, citing reports of items being shared with Democrats 24 hours before Republicans.

“Regardless of political affiliations, commissioners must be given adequate and equal time to consider the items on which they’re going to vote,” Upton said.

Upton also urged a “light touch regulatory scheme” as the key to America telecom industry success. “Subjecting [broadband] to burdensome [regulations] is a leap in the wrong direction,” he said.

Others, particularly Democratic representatives, agreed with the premise behind net neutrality, but disagreed with what they called the FCC’s half-way approach.

“The time has come to end the legal gymnastics and stop the lobbying games being played by the big broadband providers,” said Rep. Henry Waxman, D-Calif. “You should use your Title II authority as a backstop authority to protect the open internet. If you want to proceed with Section 706, that’s fine – but you shouldn’t water down the open internet rules to fit Section 706. Instead, you should get the substance right and invoke Title II as an independent basis of authority.”

Wheeler defended the Commission’s actions, listing a number of areas on which the agency had made progress on, including the forthcoming incentive auction of radio frequencies. He also pointed to a successful ruling on emergency 911 texting, which allows deaf individuals to communicate with emergency responders, as well as a effort to regulate cell phone location information.

“As wireless usage increases and as it replaces… wireline connections inside, and as GPS usage has increased, there’s been a fascinating reality that location accuracy has actually declined,” Wheeler said. “We got a notice on how to [solve] that because that’s literally a matter of life and death.

As for net neutrality, Wheeler explained that D. C. Circuit court’s January 2014 decision affirmed the Commission’s authority for net neutrality under co-called Section 706 of the 1996 Telecommunications Act. This, he said, provided a “road map” to deal with the open internet.

“When the consumer buys access to the Internet, they are buying access to the full Internet and that’s what our rules try to protect,” Wheeler said. “[We ought to] explore the power granted by Section 706, keep asking how Title II fits in, but develop a regulatory process that looks forward, not backward, because what we need is a regulatory process for the 21st century.”

Grilling Wheeler, Tennessee Republican Rep. Marsha Blackburn said that his actions had inspired “a great deal of uncertainty” among content providers, including those offering telemedicine services.

Wheeler agreed that it was important to conduct cost-benefit analysis in decision-making.

“In this rulemaking, we specifically ask what are the costs of one approach or another and what are the benefits so that we can collect that information and have that kind of analysis.”

“Our effort is to represent the American people, not company A or B,” he said.

When asked what types of prioritization were acceptable, Wheeler replied that while the courts had asked the Commission to judge prioritization on a “case-by-case basis,” the Commission is now asking the public whether it should be judged “generically.”

Waxman expressed concern that asking the public when paid prioritization is permissible will result in “a lot of ambiguity” and a lot of litigation.

“I believe bright lines will be a lot better for the market and innovation,” Waxman said.

Rep. Steve Scalise, R-La., questioned Wheeler’s motivations for only targeting ISPs and not content providers. He asked whether the Chairman had “an ax to grind” against broadband providers.

Broadband's Impact

Dianne Crocker: Recession Fears Have Real Estate Market Forecasters Hitting the Reset Button

Growing fears of recession trigger pullback on previous rosy forecasts.

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The author of this Expert Opinion is Dianne Crocker, Principal Analyst for LightBox

The lyrics to “Same As It Ever Was” by the Talking Heads certainly don’t apply to how 2022 is playing out in the commercial real estate market. Two quarters of negative economic growth has put a damper on market sentiment and triggered fears that the U.S. economy is heading for a recession. By midyear, market analysts were taking a good, hard look at their rosy forecasts from the start of the New Year and redrawing the lines.

Once upon a time…

At the start of 2022, forecasters were bullishly predicting that commercial real estate investment and lending levels would be nearly as good as 2021. This was significant, considering that 2021 set new records for deal-making and lending volume as the debt and equity capital amassed during the pandemic while looking for a home in U.S. commercial real estate.

What a difference a few quarters have made. Virtually, all the predictions that started the New Year were obsolete by mid-summer. The abrupt shift in market conditions is palpable and surprised just about everyone. Now, markets are reaching an inflection point that is in sharp contrast with the strong rebound of last year.

The two I’s: Inflation and interest rates

At the core of the recent upset in market sentiment is the persistence of high inflation, which seems to be ignoring all attempts by the Federal Reserve to raise interest rates and bring prices down. Higher inflation is having a ripple effect throughout the economy, pushing up the costs of construction materials, energy, and consumer goods. Among the notable economic indicators showing stress at mid-year was the GDP, which fell for the second consecutive quarter, and the Consumer Price Index, which jumped 9.1% year-over-year in June – the highest increase in about four decades.

In July, the CPI fell to 8.5%, an encouraging sign that inflation was beginning to stabilize. By the latest August report from LightBox, however, hopes were dashed when the CPI showed little improvement, holding firm at a still high of 8.3%.

The market is responding to a higher cost of capital as lenders tap the brakes. As the cost of capital rises with each interest rate hike and concerns of a recession intensify, many large U.S. financial institutions are pulling back on their loan originations for the rest of 2022 and into 2023. This change in tenor is a significant shift, given that 2021 was a record-breaking year for commercial real estate lending. Many lenders have already shifted to a more defensive underwriting position as they look to mitigate risks.

The Mortgage Bankers Association, which had previously predicted that lending levels in 2022 would break the $1 trillion mark for the first time revised their forecast downward in mid-July. By year-end, the MBA now expects volume to be a significant 18% below 2021 levels—and one-third lower than the bullish forecast made in February. Now, investment activity is cooling as higher borrowing costs drive some buyers from the market.

In the investment world, transactions were down by 29% at midyear due to a thinning buyer pool as higher rates impact access to debt capital. Market volatility is causing investors, lenders, and owners to rethink strategies, reconsider assumptions, and prepare for possible disruption.

Looking ahead to year-end and 2023

The rapid and diverse shifts in the market make for an uncertain forecast and certainly a more cautious investment environment. The battle between inflation and interest rates will continue over the near term. As LightBox’s investor, lender, valuation, and environmental due diligence clients move toward the 4th quarter—typically the busiest quarter of the year–unprecedented volatility is driving them to recalibrate and reforecast given recent market developments.

Continued softness in transaction volume is likely to continue as rates and valuations establish a new equilibrium. If property prices begin to level out, there will be more pressure on buyers to consider how to improve a property to get their return on investment. The next chapter of the commercial real estate market will be defined by how long inflation sticks around, how high interest rates go, and whether the economy slips into a recession (and how deeply). The greatest areas of opportunity will be found in asset classes like office and retail that are evolving away from traditional uses and morphing to meet the needs of today’s market. Until barometers stabilize, it’s important to rethink assumptions, watch developments, and recalibrate as necessary.

Dianne Crocker is the Principal Analyst for LightBox, delivering strategic analytics, best practices in risk management, market intelligence reports, educational seminars, and customized research for stakeholders in commercial real estate deals. She is a highly respected expert on commercial real estate market trends. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Broadband's Impact

Reason 3 to Attend Broadband Mapping Masterclass: State Maps vs. Federal Maps

The 3rd of 5 reasons to attend the Broadband Mapping Masterclass with Drew Clark on 9/27 at 12 Noon ET

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WASHINGTON, September 23, 2022 – The third reason to attend the Broadband Mapping Masterclass with Drew Clark on September 27, 2022, is to get a handle on what state broadband officers have and are doing with broadband maps.

While much of the action has been at the Federal Communications Commission, after state allocations have been made, funding decisions will ultimately come from state broadband officers.

Broadband Breakfast is hosting the 2-hour Broadband Mapping Masterclass to help Internet Service Providers, mapping and GIS consultants, and people in everyday communities concerned about broadband mapping.

This 2-hour Masterclass, available for only $99, will help you navigate the treacherous waters around broadband mapping. The live Broadband Mapping Masterclass is being recorded, and those who make a one-time $99 payment will obtain a guaranteed place during the live session.

ENROLL TODAY for our Zoom Webinar through PayPal.

Registrants will also receive unlimited on-demand access to the Masterclass recording. And they will receive Broadband Breakfast’s premium research report on broadband mapping.

Learn More about Why You Should Participate in the Broadband Mapping Masterclass

We’re presenting five additional reasons to attend the Broadband Mapping Masterclass.

Additional reason number 3 to attend the Masterclass

The Infrastructure Investment and Jobs Act allocates $42.5 billion for the Broadband Equity, Access and Deployment program. Every state will receive at least $100 million in funding, but the remaining more-than $37 billion will be allocated among states based upon a formula that is primarily determined by their percentage of the unserved population. (According to IIJA, a location is “unserved” if it lacks access to broadband at 25 Megabits per second (Mbps) download and 3 Mbps upload. An area is “underserved” if it lacks 100 Mbps * 20 Mbps broadband.)

That’s where the FCC’s updated broadband map come in: Once challenges to the map are concluded, the National Telecommunications and Information Administration will allocate that $37 billion pool according to the “denominator” that the NTIA reads out from the FCC map.

But state and their broadband offices have a trump card: They can and are developing their own maps to check, verify and challenge the FCC map. Furthermore, they are under no obligation to award funds according to the actual places that the FCC says are unserved or underserved.

In the Broadband Mapping Masterclass, you’ll learn what you need to know in order to tap into these efforts by state broadband offices.

ENROLL TODAY  to find out what happens next.

Learn More about Why You Should Participate in the Broadband Mapping Masterclass

Read more about the reasons to attend the Broadband Mapping Masterclass

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Broadband's Impact

Reason 2 to Attend Broadband Mapping Masterclass: Aren’t There Other Databases?

The 2nd of 5 reasons to attend the Broadband Mapping Masterclass with Drew Clark on 9/27 at 12 Noon ET.

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WASHINGTON, September 22, 2022 – The second reason to attend the Broadband Mapping Masterclass with Drew Clark on September 27, 2022, is to find out what other databases and software tools are available to get a handle on broadband mapping.

Broadband Breakfast is hosting the 2-hour Broadband Mapping Masterclass to help Internet Service Providers, mapping and GIS consultants, and people in everyday communities concerned about broadband mapping.

This 2-hour Masterclass, available for only $99, will help you navigate the treacherous waters around broadband mapping. The live Broadband Mapping Masterclass is being recorded, and those who make a one-time $99 payment will obtain a guaranteed place during the live session.

ENROLL TODAY for our Zoom Webinar through PayPal.

Registrants will also receive unlimited on-demand access to the Masterclass recording. And they will receive Broadband Breakfast’s premium research report on broadband mapping.

Learn More about Why You Should Participate in the Broadband Mapping Masterclass

In addition to obtaining lifetime access to the recording – and a premium research report from Broadband Breakfast – we’re presenting five additional reasons to attend the Broadband Mapping Masterclass between now and the LIVE Zoom Webinar on Tuesday, September 27, 2022, at 12 Noon ET.

Additional reason number 2 to attend the Masterclass

The first version of the National Broadband Map was published with much fanfare on February 17, 2011. Each of the 50 states, 5 territories and the District of Columbia compiled broadband information from providers on a Census block basis. Significantly, carriers were required to disclose their service locations and feed that information into state and federal maps.

The National Broadband Map lasted for about five years, when the data collection effort – a partnership of the FCC, the National Telecommunications and Information Administration and the state broadband offices – concluded. But the publicly available data fed by the National Broadband Map remained. Many private companies and non-profit entities began to use this publicly available data and integrate into other public collections of data.

In the Broadband Mapping Masterclass, you’ll learn about these resources, databases, tools and projects – and how they provide many more forms of broadband data than simply that which is available from the FCC.

ENROLL TODAY  to find out what happens next.

Learn More about Why You Should Participate in the Broadband Mapping Masterclass

Read more about the reasons to attend the Broadband Mapping Masterclass

ENROLL TODAY

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